SEDAR Interim Financial Statements

Madison Pacific Properties Inc. Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (expressed in thousands of Canadian dollars) Notice of No Auditor Review of Interim Financial Statements Under National Instrument 51-102 “Continuous Disclosure Obligations”, Part 4, Subsection 4.3(3a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor, PricewaterhouseCoopers LLP, has not performed a review of these financial statements in accordance with standards established by Chartered Professional Accountants of Canada (CPA Canada) for a review of interim financial statements by an entity’s auditor. November 13, 2025 Madison Pacific Properties Inc. Interim Consolidated Statements of Financial Position As at September 30, 2025 and December 31, 2024 (unaudited) (expressed in thousands of Canadian dollars) The accompanying notes are an integral part of these condensed interim consolidated financial statements. September 30, December 31, Note 2025 2024 $ $ Assets Non-current assets Investment properties 3 758,151 724,195 Investment in associate and joint ventures 4 59,639 62,982 Deferred income tax assets 13 626 708 Other non-current assets 643 357 819,059 788,242 Current assets Cash and cash equivalents 16,684 19,052 Amounts receivable and other current assets 5 5,809 2,075 Income taxes receivable 264 826 22,757 21,953 Total assets 841,816 810,195 Liabilities Non-current liabilities Debt on investment properties 6 255,904 206,643 Deferred income tax liabilities 13 59,632 57,545 Other non-current liabilities 6(a) 2,207 1,318 317,743 265,506 Current liabilities Current portion of debt on investment properties 6 93,505 107,948 Accounts payable and accrued liabilities 7 8,815 7,092 Income taxes payable 25 365 Uncertain tax liabilities 13 500 500 102,845 115,905 Total liabilities 420,588 381,411 Equity Equity attributable to shareholders of the Company Share capital 9 72,715 72,715 Retained earnings 333,758 344,037 406,473 416,752 Non-controlling interests 14,755 12,032 Total equity 421,228 428,784 Total liabilities and equity 841,816 810,195 Subsequent events 19 Approved by the Board of Directors “John DeLucchi” Director “Alistair Duncan” Director Madison Pacific Properties Inc. Interim Consolidated Statements of Changes in Equity For the Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars) The accompanying notes are an integral part of these condensed interim consolidated financial statements. Note Share Capital $ Retained Earnings $ Total $ Non- controlling interests $ Total equity $ Balance - December 1, 2023 72,715 332,495 405,210 12,547 417,757 Net income and comprehensive income - 13,356 13,356 252 13,608 Dividends - (6,244) (6,244) - (6,244) Distributions to non controlling interest (195) (195) Transaction with non-controlling interest 10 - (375) (375) (836) (1,211) Balance - August 31, 2024 72,715 339,232 411,947 11,768 423,715 Balance - January 1, 2025 72,715 344,037 416,752 12,032 428,784 Net income and comprehensive income - 16,182 16,182 4,756 20,938 Dividends 11 - (2 --- 6,461) (26,461) - (26,461) Distributions to non controlling interest - - - (2,033) (2,033) Balance - September 30, 2025 72,715 333,758 406,473 14,755 421,228 Attributable to shareholders of the Company Madison Pacific Properties Inc. Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except per share data) The accompanying notes are an integral part of these condensed interim consolidated financial statements. September 30, August 31, September 30, August 31, Note 2025 2024 2025 2024 $ $ $ $ Property revenues 12,15 34,053 34,068 11,509 11,358 Property operating expenses 15 10,388 9,915 3,476 2,931 23,665 24,153 8,033 8,427 General and administrative expenses 15 3,698 3,977 1,106 1,262 19,967 20,176 6,927 7,165 Net gain (loss) on fair value adjustment on investment properties 3 18,622 7,838 (3,263) (1,817) Equity (losses) earnings of associate and joint ventures 4(a) (1,239) 802 (461) 5 37,350 28,816 3,203 5,353 Interest income 648 1,720 159 401 Interest expense 11,664 9,502 4,053 3,178 Interest expense and other costs on uncertain tax positions - 223 - - Losses on fair value adjustment on interest rate swaps 6(a) 1,104 2,742 484 1,605 Income (loss) before income taxes 25,230 18,069 (1,175) 971 Income taxes 13 4,292 4,461 319 951 Net income (loss) and comprehensive income (loss) 20,938 13,608 (1,494) 20 Net income (loss) and comprehensive income (loss) attributable to: Shareholders of the Company 16,182 13,356 (1,631) (42) Non-controlling interests 4,756 252 137 62 20,938 13,608 (1,494) 20 Income (loss) per share 14 $0.27 $0.22 ($0.03) $0.00 Nine Months Ended Three Months Ended Madison Pacific Properties Inc. Interim Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of dollars) The accompanying notes are an integral part of these condensed interim consolidated financial statements. September 30, August 31, Cash flows (used in) from: Note 2025 2024 $ $ Operating activities Net income 20,938 13,608 Items not affecting cash Net gain on fair value adjustment on investment properties (18,622) (7,838) Amortization 1,556 1,052 (Recovery) allowance for expected credit losses (4) 95 Equity losses (earnings) of associate and joint ventures 1,239 (802) Unrealized losses on fair value adjustment on interest rate swaps 1,104 2,742 Recognition of rental revenue on a straight-line basis (352) (20) Deferred income taxes 13 2,169 777 Provision for uncertain tax liabilities - 223 Cash flow from operations before changes in non-cash operating accounts 8,028 9,837 Changes in non-cash operating accounts Amounts receivable and other assets (3,262) (1,912) Income taxes receivable 562 (300) Accounts payable and accrued liabilities 1,558 522 Income taxes payable (340) (2,656) Uncertain tax liabilities - (31,310) Cash generated from (used in) operating activities 6,546 (25,819) Investing activities Acquisition of investment properties and acquisition deposits 3(b) (17,128) (16,037) Building improvements on investment properties (2,371) (1,577) Other investment property expenditures (1,972) (782) Net proceeds from disposition of investment properties 3(c) 8,485 - Investment in associate and joint ventures 4(a) (1,646) (12,695) Distributions received from joint ventures 4(a) 3,750 - Cash used in investing activities (1 --- 0,882) (31,091) Financing activities Net proceeds from debt on investment properties 6 129,806 42,076 Repayment of debt on investment properties 6 (99,344) (40,687) Distributions to non-controlling interests (2,033) (195) Dividends paid 11 (26,461) (3,122) Transactions with non-controlling interests and related costs 10 - (1,211) Cash generated from (used in) financing activities 1,968 (3,139) Decrease in cash and cash equivalents (2,368) (60,049) Cash and cash equivalents - beginning of period 19,052 74,680 Cash and cash equivalents - end of period 16,684 14,631 Supplemental cash flow information Interest received 715 1,745 Interest paid 11,145 8,970 Interest paid for uncertain tax liabilities - 13,183 Income tax instalments paid 1,901 24,927 Significant non-cash items Assumed debt on acquisition of investment property 3(b), 6 3,115 - Nine Months Ended Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 1 1. General information Madison Pacific Properties Inc. (the “Company”) owns, develops and operates industrial, commercial, multi- family, retail and office rental properties located in British Columbia, Alberta, and Ontario. The Company also has investments in joint ventures that develop residential properties. The Company is incorporated and domiciled in Canada. The head office of the Company is located at 389 West 6th Avenue, Vancouver, British Columbia, V5Y 1L1, and its registered office is located at 25th Floor, Toronto-Dominion Bank Tower, 700 West Georgia Street, Vancouver, British Columbia, V7Y 1B3. Change of Year End In July 2024, the Company’s Board of Directors approved a change of financial year-end of the Company from August 31 to December 31. The Company’s transition year was the four months ended December 31, 2024. The reasons for the change of year-end are to align the Company’s external reporting with its internal financial management and reporting which is based on a calendar year and for comparison purposes with its peers in the real estate industry that typically have a calendar financial year-end. The comparative period in these condensed interim consolidated financial statements is the three and nine months ended August 31, 2024. 2. Summary of material accounting policies and critical accounting estimates a. Basis of presentation These condensed interim consolidated financial statements for the three and nine months ended September 30, 2025 have been prepared in accordance with International Accounting Standard (“IAS”) 34, “Interim Financial Reporting”. The condensed interim consolidated financial statements do not include all the information and disclosures required in the annual consolidated statements and should be read in conjunction with the Company’s annual consolidated financial statements for the four months ended December 31, 2024, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”). The condensed interim consolidated financial statements have been prepared using the same accounting policies and methods as those used in the annual consolidated financial statements for the four months ended December 31, 2024. The condensed interim consolidated financial statements have been presented in Canadian dollars rounded to the nearest thousand unless --- otherwise indicated. These condensed interim consolidated financial statements were approved by the Board of Directors for issue on November 13, 2025. b. Principles of consolidation Subsidiaries These condensed interim consolidated financial statements incorporate the assets and liabilities of all entities controlled by the Company and the results of all controlled entities. Controlled entities are those entities over which the Company has i) the power to govern the financial and operating policies, ii) the right to receive benefits from that entity, and iii) the ability to use its operating decisions to alter the benefits received. These Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 2 criteria are met by having a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. In addition, for consolidation purposes, factors may exist where an entity may consolidate without having more than 50% of the voting power through ownership or agreements, or in the circumstances of enhanced minority rights, as a consequence of de facto control. De facto control is control without the legal right to exercise unilateral control, and involves decision-making abilities that are not shared with others and the ability to give direction with respect to the operating and financial policies of the entity concerned. Where control of a subsidiary ceases during a financial year, its results are included up to the point in the year when control ceases. Where control of an entity is acquired during a financial year, its results are included in the consolidated statement of income and comprehensive income from the date on which control commences. The Company’s subsidiaries are Metro Vancouver Properties Corp. (“MVP”), MP Western Properties Inc., 1073774 Properties Inc., 3530639 Canada Inc., 801325 B.C. Ltd., the MPW Properties Partnership, Madison Silverdale Developments Corp., Madison Developments 2800 Barnet Ltd., the MT Properties Limited Partnership, and MT Management Inc. The Company holds a 100% interest in MP Western Properties Inc., 1073774 Properties Inc., 3530639 Canada Inc., Madison Silverdale Developments Corp. and a 100% interest in MVP which holds a 100% interest in the MPW Properties Partnership, 801325 B.C. Ltd., and Madison Developments 2800 Barnet Ltd., a 60.9% interest in the MT Properties Limited Partnership, and a 75% interest in MT Management Inc. All inter-company balances, transactions, and unrealized profits resulting from inter-company transactions are eliminated. Non-controlling interests Non-controlling interests represent equity interests in subsidiaries owned by outside parties. The share of net assets of subsidiaries attributable to non-controlling interests is presented as a component of equity. Changes in the parent company’s ownership interest in subsidiaries that do not result in a loss of control are accounted for as equity transactions. Joint arrangements The Company classifies its interests in joint arrangements as either a joint venture or a joint operation. A joint arrangement is a contractual arrangement whereby the Company and oth --- er parties undertake an economic activity that is subject to joint control. A joint arrangement is classified as a joint venture when the parties to the joint arrangement have rights over the net assets of the joint arrangement, whereas a joint arrangement is classified as a joint operation when the arrangement provides rights to assets and obligations for liabilities for the parties sharing joint control. Joint operations Joint operations are accounted for using the proportionate consolidation method whereby the Company’s share of assets, liabilities, income, expenses and cash flows of jointly controlled operations are combined with the equivalent items in the results on a line-by-line basis. Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 3 Investment in associates & joint ventures Associates are entities over which the Company has significant influence but not control. Investments in associates and joint ventures are accounted for using the equity method as follows: ? Investments are initially recognized at cost. ? Investments in associates and joint ventures include goodwill and intangible assets identified on acquisition, net of any accumulated impairment loss. ? The Company’s share of its associates and joint ventures’ post-acquisition profits or losses is recognized in the consolidated statement of income and comprehensive income. ? Dividends and distributions receivable from associates and joint ventures reduce the carrying amount of the investment. ? The Company’s liability with respect to its associates and joint ventures is limited to its net investment where it has no obligation to fund any subsequent losses should they arise. There is no obligation beyond the initial investment. ? Associates and joint ventures are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. c. Critical accounting estimates and judgements The preparation of financial statements in accordance with IAS 34 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company’s accounting policies. The critical accounting estimates and judgements applied during the nine months ended September 30, 2025, are consistent with those set out in note 2 to the Company’s consolidated financial statements for the four months ended December 31, 2024. 3. Investment properties Note Nine months ended September 30, 2025 Four months ended December 31, 2024 $ $ Balance at beginning of period 724,195 708,341 Additions: Acquisitions 3(b) 20,243 11,227 Building improvements on investment properties 2,026 364 Disposition 3(c) (8,485) - Recognition of rental revenue on a straight-line basis 352 39 Tenant improvements 2,128 278 Amortization of tenant improvements (886) (228) Leasing commissions 354 512 Amortization of leasing commissions (398) (145) Net gain on fair value adjustment 18,622 3,807 Balance at end of period 758,151 724,195 Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 4 a. Valuations W --- hen performing fair value assessments for its investment properties, the Company incorporates a number of factors including recent market transactions, recent leasing activity, market vacancy, non-recoverable capital expenditures and other information obtained from market research and recently completed leases and acquisitions. The capitalization rates used are generally based on ranges provided by external valuators and these assumptions are further compared against information obtained from independent industry experts. The adverse Canadian and global market, economic and political conditions and ongoing geopolitical events in the world has caused global economic disruption and uncertainty. This has increased the risk and uncertainty surrounding valuation estimates due to limited market activity for comparable transactions, as well as uncertainty regarding the expected length of these events and the resulting impact on the Company’s cash flows from investment properties. In developing its estimates, management performed an assessment of its tenants and portfolio of investment properties, as well as an evaluation of the changes in the overall market conditions for the asset classes in the Company’s portfolio. The fair value of the Company’s investment properties is considered to be at Level 3 in the fair value hierarchy, as significant unobservable inputs are required to determine fair value. b. Investment property acquisitions During the nine months ended September 30, 2025, the Company acquired the remaining 50% ownership interest in an industrial property from its co-owner for $17,784 including closing costs. The property is located in Burnaby, British Columbia with a 114,497 square foot building and a site area of 5.0 acres. The purchase price for this investment property was settled by the assumption of a mortgage of $3,115 and cash for $14,669. During the nine months ended September 30, 2025, the Company acquired a 50% interest in a 20-unit residential apartment property in Metro Vancouver for $2,459 including closing costs. The total consideration was settled by cash (note 15). During the four months ended December 31, 2024, the Company acquired a 50% interest in a 35-unit apartment property in Metro Vancouver for $7,322, including closing costs and taxes, settled by the assumption of a mortgage of $3,235 and cash for $4,087, and a 50% interest in a 20-unit apartment property in Metro Vancouver for $3,905, including closing costs and taxes (note 15). c. Investment property dispositions During the nine months ended September 30, 2025 and concurrent to the acquisition of the 50% interest in an industrial property, the Company sold its 50% interest in an industrial property to the property’s co-owner for net proceeds of $8,485. The property is located in Burnaby, British Columbia, with a 39,339 square foot building and a site area of 1.82 acres. The Company also repaid the mortgage on this property of $4,119. For the four months ended December 31, 2024, the Company had no dispositions of investment properties. Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 5 d. Right-of-use asset Included in investment properties is a right-of-use asset (“ROU Asset”) arising from a land lease. The ROU Asset was recognized e --- ffective September 1, 2019 upon the adoption of IFRS 16, Leases (“IFRS 16”). e. Sensitivity The following table provides a sensitivity analysis for the weighted average capitalization rate on commercial properties applied at September 30, 2025, excluding properties under development, a property held for sale, and a ROU Asset of $2,214 (note 3(d)): Capitalization rate increase (decrease) Weighted average capitalization rate Fair value of investment properties (at Company's ownership) $ Fair value variance $ % change (0.75%) 3.81% 901,610 145,673 19.3% (0.50%) 4.10% 837,639 81,702 10.8% (0.25%) 4.37% 785,806 29,869 4.0% September 30 4.54% 755,937 - - 0.25% 4.89% 702,220 (53,717) (7.1%) 0.50% 5.15% 667,408 (88,529) (11.7%) 0.75% 5.40% 636,117 (119,820) (15.9%) 4. Investments in associate and joint ventures Note September 30, 2025 December 31, 2024 $ $ Investment in associate 4(a) 23,660 24,604 Investments in joint ventures 4(a) 35,979 38,378 59,639 62,982 a. Investments in associate and joint ventures The investment in associate includes an equity investment in Grant Street Properties Inc. (“GSP”), a related private company that owns and manages commercial, industrial and multi-family rental properties. As at September 30, 2025, the Company holds an ownership interest of 36.04% (December 31, 2024 – 36.04%) in GSP. This investment has been accounted for using the equity method. The investment in joint ventures includes equity investments in the Silverdale Hills Limited Partnership (the “Silverdale Hills LP”) and the 2798 Barnet Development Limited Partnership (the “Barnet LP”). The Company Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 6 holds an ownership interest of 50% in each of the Silverdale Hills LP and the Barnet LP. These limited partnerships have been accounted for using the equity method. Silverdale Hills LP As at September 30, 2025, the Silverdale Hills LP owns approximately 1,425 acres of residential development designated lands in Mission, British Columbia. As of November 13, 2025, the Silverdale Hills LP received approval from the City of Mission to rezone 14 properties totalling approximately 141 acres within the Silverdale Central Neighborhood Plan area to the new Comprehensive Development 59 Zone, which could accommodate residential units of varying formats, parks, trails and neighborhood commercial uses (the “Loftus Village Project”). In July 2024, the Silverdale Hills LP also entered into servicing agreements with the City of Mission to construct and install the first phase of public services, facilities, and utilities to support a 50-acre development within the Loftus Village Project lands. On March 31, 2025, the Silverdale Hills LP acquired approximately 19 acres of residential development lands in Mission, British Columbia for $26,168 including closing costs and taxes, complementary to the Loftus Village Project. Barnet LP The Barnet LP owns a retail property in Coquitlam, British Columbia which has redevelopment potential into a residential and mixed-use property. The Company’s share of the associate and joint ventures consists of the following: Nine months ended September 30, Four months ended December 31, Nine months ended September 30, Four months ended December 31, Nine months ended Septe --- mber 30, Four months ended December 31, 2025 2024 2025 2024 2025 2024 $ $ $ $ $ $ Balance at beginning 24,604 24,447 38,378 36,888 62,982 61,335 of period Share of (losses) (944) 157 (295) (778) (1,239) (621) earnings for the period Additional equity - - 1,646 2,268 1,646 2,268 investments Distributions - - (3,750) - (3,750) - Balance at end of period 23,660 24,604 35,979 38,378 59,639 62,982 Associate Joint ventures Total As at and for the Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 7 During the nine months ended September 30, 2025, the Company made additional equity investments of $1,300 (four months ended December 31, 2024 – $1,900) in the Silverdale Hills LP to fund development and land servicing costs for the Loftus Village Project and the acquisition of additional parcels of undeveloped residential land. During the nine months ended September 30, 2025, the Company made equity investments of $346 (four months ended December 31, 2024 – $368) in the Barnet LP to fund its pre-development costs. When applying the equity method, financial statements of associates and joint ventures are prepared for the same reporting period as the Company. When necessary, adjustments are made to bring the accounting policies in line with those of the Company. The following table summarizes the financial information for the Company’s associate and joint ventures, showing the Company’s proportionate share: September 30, 2025 August 31, 2024 September 30, 2025 August 31, 2024 September 30, 2025 August 31, 2024 $ $ $ $ $ $ Revenue and other income 1,562 1,132 1,009 1,923 2,571 3,055 Expenses 962 1,074 1,304 1,372 2,266 2,446 Net (loss) gain on fair value adjustment on investment properties (1,544) 193 - - (1,544) 193 Net (loss) income for the period (944) 251 (295) 551 (1,239) 802 Nine months ended Nine months ended Nine months ended Associate Joint ventures Total September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024 $ $ $ $ Assets 41,665 41,619 114,406 95,282 Liabilities 18,090 17,101 78,346 56,824 Net assets 23,575 24,518 36,060 38,458 Associate Joint ventures b. Corporate guarantees The Silverdale Hills LP, of which the Company has a 50% interest, obtained the following loans and credit facilities to fund its development costs and acquisition of parcels of undeveloped residential lands. ? In October 2022, the Silverdale Hills LP obtained a floating rate bank loan of $11,100 for which the Company provided a guarantee of $5,550. The bank loan is payable on demand and matures in 2026. Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 8 ? In November 2022, the Silverdale Hills LP obtained a floating rate bank loan facility of $70,000, which matures in 2027. The loan is payable on demand, and the Company has provided a guarantee for $35,000. ? In July 2024, the Silverdale Hills LP obtained development agreement surety bonds for a total of $25,804 to provide security to the servicing agreements entered with the City of Mission for a 50 acre development within the Loftus Village Project lands --- . The Company has provided a guarantee for the surety bonds. As at September 30, 2025, the development agreement surety bonds had an outstanding balance of $13,989. In October 2025, the Silverdale Hills LP obtained an additional $12,895 surety bond as security for the first townhome development in the Loftus Village Project. As at November 13, 2025, the surety bond had an outstanding balance of $12,895. ? In January 2025, the Silverdale Hills LP obtained a committed land servicing loan facility to a maximum of $88,900, which matures in October 2027, to fund the first phase of the Loftus Village Project land servicing costs. The Company has provided a guarantee for $44,450. As at September 30, 2025, $36,803 has been drawn against the facility by the Silverdale Hills LP. The Company has provided a guarantee of $14,625 for a $29,250 bank loan owed by the Barnet LP of which the Company has a 50% interest. The loan is repayable on demand and matures in September 2026. 5. Amounts receivable and other current assets Note September 30, 2025 December 31, 2024 $ $ Prepaid expenses, deposits and other 3,274 805 Accounts receivable and deferred rents receivable 1,548 1,024 Loan proceeds in transit 6 969 - Fair value assets on interest rate swaps - 215 Interest receivable and current portion of loans receivable 18 31 5,809 2,075 Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 9 6. Debt on investment properties Note Nine months ended September 30, 2025 Four months ended December 31, 2024 $ $ Balance at beginning of period 314,591 302,908 Net proceeds from debt issuances 129,806 17,434 Assumed debt 3(b) 3,115 3,235 Loan proceeds in transit 5 969 - Amortization of deferred financing costs 272 111 Repayment of debt (99,344) (9,097) Balance at end of period 349,409 314,591 Less: current portion 93,505 107,948 Non-current portion 255,904 206,643 Mortgage and construction loans are secured by charges against the related properties and corporate guarantees. Of the total mortgage and construction loans (before netting of deferred financing costs and fair value adjustments to assumed debt and excluding lease liabilities), $346,088 (December 31, 2024 – $300,923) bears interest at fixed rates ranging from 2.23% to 6.35% (December 31, 2024 – 2.23% to 6.35%) per annum and $2,575 (December 31, 2024 – $12,081) bears interest at bank prime plus 0.25% (December 31, 2024 – bank prime to bank prime plus 0.5%). The weighted average interest rate on fixed rate debt as at September 30, 2025, was 4.71% (December 31, 2024 – 4.29%). a. Interest rate swaps The Company has entered into interest rate swaps with Canadian chartered banks on seven mortgages to fix the Company’s interest rates on those mortgages. The swaps had notional amounts as at September 30, 2025 totalling $117,035 (December 31, 2024 – $95,927), fixed swap rates ranging from 4.50% to 5.94% (December 31, 2024 – 2.52% to 5.94%), and maturity dates ranging from February 2026 to March 2030. The total notional amount of the interest rate swaps represented 33.6% as at September 30, 2025 (December 31, 2024 – 30.6%) of the total debt on investment properties (before netting of deferred financing costs and fair value adjustments on assumed debt and excluding lease liabilities). The Company antic --- ipates holding the mortgages and interest rate swap contracts until maturity. Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 10 The total fair value of the interest rate swap assets and liabilities and net unrealized losses on those contracts are as follows: September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024 $ $ $ $ Interest rate swaps – current - 215 - - Interest rate swaps – non-current - - 2,207 1,318 Fair value liabilities Fair value assets September 30, 2025 August 31, 2024 September 30, 2025 August 31, 2024 $ $ $ $ Interest rate swaps 1,104 2,742 484 1,605 Net unrealized losses on interest rate swaps Three months ended Nine months ended b. Lease liability Future minimum lease payments under this lease are as follows: September 30, 2025 $ Within one year 105 Within two to five years 438 Over five years 2,678 Total future minimum lease payments 3,221 Less: future interest costs (1,007) Present value of lease payments 2,214 Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 11 7. Accounts payable and accrued liabilities September 30, 2025 December 31, 2024 $ $ Trade payables 796 1,272 Accrued interest payable 1,071 732 Other accrued liabilities 2,390 1,656 Tenant deposits 2,212 1,982 Unearned revenue 2,346 1,450 8,815 7,092 8. Bank indebtedness In February 2025, the Company replaced the $20,000 line of credit with a line of credit of up to $45,000 with a major Canadian chartered bank. This line of credit bears its interest at bank prime rate plus 0.5%, or the Canadian Overnight Repo Rate Average (“CORRA”) rate for the applicable period plus 2.30%. As at September 30, 2025, $nil had been drawn against this line of credit. The amount available under this line of credit varies with the fair value of investment properties pledged and the cash flows the properties generate, up to a maximum of $45,000. As at September 30, 2025, the maximum borrowing capacity available was approximately $25,500. Second mortgages against certain of the Company’s investment properties, assignments of rents and insurance, as well as general security agreements creating floating charges over all of the assets included in this $45,000 line of credit, have been provided as security. Amounts advanced under this line of credit are repayable on demand. During the two months ended February 28, 2025, when the previous $20,000 line of credit was in place, $nil (December 31, 2024 – $nil) was drawn against it. 9. Share capital a. Authorized and issued shares The authorized share capital of the Company consists of an unlimited number of Class A non-voting preferred shares without par value, an unlimited number of Class B voting common shares without par value (“Class B Shares”), and an unlimited number of Class C non-voting shares without par value (“Class C Shares”). The following table summarizes the issued share capital as at September 30, 2025 and December 31, 2024: Number Amount Number Amount Number Amount $ $ $ Balance – September 30, 2025 and December 31, 2024 7,355,420 8,369 52,107,135 64,346 59, --- 462,555 72,715 Class B Shares Class C Shares Total Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 12 No shares were issued or cancelled during the nine months ended September 30, 2025 and the four months ended December 31, 2024. b. Share option plan The Company implemented a share option plan (the “Plan”) effective January 1, 2019. Under the Plan, the Company reserves Class B Shares equal to 2% of aggregate outstanding Class B Shares and Class C Shares for issuance upon the exercise of share options granted under the Plan. As at November 13, 2025, 1,189,251 Class B Shares are reserved for the issuance under the Plan. The Plan provides that share options may be issued only to executives, employees and outside directors of the Company or of any of its subsidiaries and that options granted to insiders (as defined by Toronto Stock Exchange rules) shall not exceed 10% of the outstanding Class B Shares. The Plan and the terms of options granted, including the exercise price, the expiry time, the vesting period and other terms and conditions relating to such options, shall be administered by the Compensation Committee or any other committee to which such authority is delegated by the Board of Directors. As at November 13, 2025, no share options had been granted under the Plan. 10. Non-controlling interest MVP On July 3, 2024, the Company acquired the remaining 0.25% equity interest in its subsidiary MVP following completion of MVP’s share consolidation and going private transaction (the “Transaction”). The Transaction was structured as a consolidation of MVP’s Class B Voting Common Shares (the “MVP Class B Shares”) with all MVP Class B Shares being consolidated on the basis of one post-consolidation MVP Class B Share for each 1,941,489 pre-consolidation MVP Class B Shares, without any entitlement to receive fractional shares. In lieu of receiving a fractional share, minority shareholders were paid cash consideration of $0.36 per pre- consolidation MVP Class B share. As a result of the consolidation, the Company became the holder of the sole post-consolidation MVP Class B Share and the sole remaining shareholder of MVP. MVP’s shareholders approved the Transaction at a special meeting of the shareholders of MVP held on June 27, 2024. The vote in favour of completing the Transaction was approved by 94.63% of the votes cast by holders of MVP Class B Shares, excluding the votes cast by the Company and its related entities and their joint actors. MVP paid total consideration of $1,000 to its minority shareholders. Following the completion of the share consolidation, MVP received an order from the securities regulatory authorities whereby it ceased to be a reporting issuer. The Transaction was accounted for as an equity transaction. The difference between the consideration paid and the related transaction costs for a total of $1,211, and the carrying value of non- controlling interests of MVP as at July 3, 2024 of $375 was charged to retained earnings in the consolidated statement of financial position. Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollar --- s, except number of shares and per share amounts) 13 11. Dividends The following table summarizes the dividends paid during the nine months ended September 30, 2025 and the four months ended December 31, 2024: Declaration date Payment date Dividend per share (Class B and Class C Shares) Total dividends paid $ $ July 12, 2024 September 4, 2024 0.0525 3,122 February 12, 2025 March 3, 2025 0.0525 3,122 May 14, 2025 June 4, 2025 0.3400 20,217 August 13, 2025 September 3, 2025 0.0525 3,122 12. Property revenues The following table summarizes the components of property revenues for: September 30, 2025 August 31, 2024 September 30, 2025 August 31, 2024 $ $ $ $ Rental revenue 33,151 33,149 11,224 11,072 Property management revenue 902 919 285 286 34,053 34,068 11,509 11,358 Nine months ended Three months ended 13. Income taxes The following table summarizes the components of income taxes for: September 30, 2025 August 31, 2024 September 30, 2025 August 31, 2024 $ $ $ $ Current income tax expense 2,123 3,684 1,441 1,159 Deferred income tax expense (recovery) 2,169 777 (1,122) (208) 4,292 4,461 319 951 Nine months ended Three months ended Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 14 Income taxes vary from the amount that would be expected if computed by applying the Canadian federal and provincial statutory income tax rates to the Company’s income before income taxes as shown in the following table: $ $ Income before income taxes 25,230 18,069 $ % $ % Expected income taxes at statutory rates 6,591 26.1 4,836 26.8 Adjustments Non-deductible interest - - 69 0.4 Non-taxable portion of unrealized capital gains (2,196) (8.7) (875) (4.8) Provision for uncertain tax positions - - (426) (2.4) Equity losses (earnings) in associate and joint ventures 335 1.3 (216) (1.2) Taxable portion of (losses) earnings from joint ventures (117) (0.5) 131 0.7 Unrealized losses on fair value adjustment on interest 298 1.2 741 4.1 rate swaps Non-controlling interest in partnership (702) (2.8) (152) (0.8) Other items (4) - (134) (0.7) Adjustments in respect of prior years 87 0.3 487 2.7 Income taxes 4,292 16.9 4,461 24.8 August 31, 2024 September 30, 2025 Nine months ended Deferred income tax liabilities (assets) comprise the following: September 30, 2025 December 31, 2024 $ $ Benefit of non-capital losses carried forward (6,067) (5,924) Deferred partnership income (545) (261) Investment properties 63,199 61,084 Tenant improvements and leasing costs 1,699 1,315 Straight-line rental revenue in excess of base rents 720 623 59,006 56,837 The entire change in deferred income tax liabilities and assets for the nine months ended September 30, 2025 and the four months ended December 31, 2024 has been recognized in net income for those respective periods. As at September 30, 2025, the Company has approximately $22,470 of non-capital losses which begin to expire in 2033, which may be used to reduce future Canadian income taxes otherwise payable. Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 15 The non-capital losses expire as --- follows: Non-capital losses carried forward $ 2033 40 2034 29 2035 108 2036 14 2037 38 2038 2,389 2039 1,396 2040 1,004 2041 3,520 2042 3,537 2043 6,960 2044 1,569 2045 1,866 22,470 Uncertain tax positions The Company and certain subsidiaries received tax notices of reassessments from the Canada Revenue Agency (“CRA”) and Alberta Tax and Revenue Administration (“ATRA”), denying the use of certain losses, deductions and tax credits arising from prior years. The Company and its subsidiaries filed notice of objections and appeals to the reassessments with the CRA and ATRA. The appeal for one of the companies, Madison Pacific Properties Inc. (“MPP”) was heard by the Tax Court of Canada (“TCC”) and in December 2023, the TCC ruled in favor of the CRA, denying MPP the ability to use certain carryforward losses. MPP appealed the TCC decision to the Federal Court of Appeal (“FCA”) in January 2025 with the FCA dismissing MPP’s appeal. In March 2025, MPP filed an application to the Supreme Court of Canada (“SCC”) seeking leave to appeal the FCA decision. In September 2025, the SCC dismissed MPP’s leave application. This decision marked the conclusion of the legal process for MPP’s appeal. The Company has recorded a full provision for $51,450 in the year ended August 31, 2024 against the carrying value of the deposits, deferred tax assets related to unused carryforward amounts and liability for estimated awarded legal costs for the MPP reassessment and for two other reassessed subsidiaries. As at August 31, 2024, the Company has paid related cash tax deposits totalling $50,580 to the CRA and ATRA for the taxes and estimated interest. The Company is in the process of concluding a settlement with the CRA on all remaining tax appeals. The settlement pertains to interest relief for undue delay by the CRA in respect of the administration of the Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 16 Company’s matters. As at November 13, 2025, the amount of interest relief and amount to be refunded is uncertain. 14. Income (loss) per share September 30, 2025 August 31, 2024 September 30, 2025 August 31, 2024 Net income (loss) attributable to shareholders of the Company $16,182 $13,356 ($1,631) ($42) Weighted average number of shares outstanding 59,462,555 59,462,555 59,462,555 59,462,555 Basic and diluted income (loss) per share $0.27 $0.22 ($0.03) $0.00 Three months ended Nine months ended 15. Related party transactions The following transactions occurred in the normal course of operations and are measured at the exchange amounts, which are the amounts agreed upon by the related parties: The Company has engaged the services of a construction and property management services company owned by a related party. During the nine months ended September 30, 2025, construction management services and property management services paid to this company totalled $607 (nine months ended August 31, 2024 – landscaping, maintenance and construction management services $703). During the nine months ended September 30, 2025, the Company jointly acquired an apartment property with its equity investee, GSP (note 3(b)). Subsequent to September 30, 2025, the Company entered into an agreement to jointly acquire an apartment property with its equity investee, --- GSP (note 19). During the four months ended December 31, 2024, the Company jointly acquired two apartment properties with its equity investee, GSP (note 3(b)). During the nine months ended August 31, 2024, the Company also jointly acquired three residential apartment properties with its equity investee, GSP. The Company acquired in December 2023 a 50% interest in a 15-unit residential apartment property in Metro Vancouver for $2,225 including closing costs and taxes, in February 2024 a 50% interest in a 42-unit residential apartment property in Metro Vancouver for $6,259 including closing costs and taxes, and in June 2024 a 50% interest in a 14-unit apartment property in Metro Vancouver for $3,190 including closing costs and taxes. Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 17 During the nine months ended August 31, 2024, the Company acquired 328,240 newly issued shares in its equity investee GSP for $2,137. The Company also acquired 153,610 GSP shares from an unrelated GSP shareholder for $1,000, resulting in a total interest of 36.04%. GSP is a private company where certain of its shareholders and key management personnel are related to a director of Madison. During the nine months ended September 30, 2025, the Company engaged the services of an electrical contractor controlled by a shareholder of the Company for which it paid fees of $16 (nine months ended August 31, 2024 – $3). During the nine months ended September 30, 2025, rental revenues of $2,253 (nine months ended August 31, 2024 – $3,180) were received from a shareholder of the Company and from tenants that are companies related to a shareholder of the Company. During the nine months ended September 30, 2025, the Company incurred management consulting charges of $1,097 from a shareholder of the Company for asset management services, development and other management support for tax services (nine months ended August 31, 2024 – $1,060), which includes the compensation of the Company’s chief executive officer, paid through the shareholder pursuant to a management service agreement for a total of $371 (nine months ended August 31, 2024 – $360). During the nine months ended September 30, 2025, the Company recorded administration expenses of $11 from a Company related to a shareholder (nine months ended August 31, 2024 – $13). The Company has provided a limited guarantee of $18,750 (December 31, 2024 – $14,726) on the MT Properties Limited Partnership mortgage debt. During the nine months ended September 30, 2025, a guarantee fee of $37 (nine months ended August 31, 2024 – $33) was paid to the Company. Key management personnel Key management personnel include the Company’s directors and officers. The following table summarizes compensation awarded to key management personnel for the nine months ended: September 30, 2025, August 31, 2024 $ $ Salaries and short-term employee benefits 1,455 1,506 Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 18 16. Financial instruments Fair value of financial instruments The following table cate --- gorizes financial assets or liabilities measured or disclosed at fair value by level according to the significance of inputs used in making measurements: Fair value hierarchy Carrying Value Fair Value Carrying Value Fair Value Recurring measurement $ $ $ $ Fair value assets on interest rate swaps Level 3 - - 215 215 Fair value liabilities on interest rate swaps Level 3 2,207 2,207 1,318 1,318 Fair values disclosed Debt on investment properties Level 3 347,195 347,458 312,333 310,350 December 31, 2024 September 30, 2025 Cash and cash equivalents, amounts receivable and other current assets, other non-current assets, and accounts payable and accrued liabilities have fair values that approximate their carrying values. The estimated fair values of debt on investment properties and interest rate swaps are based on values derived using market interest rates of similar instruments and incorporate assumptions regarding current market interest rates, terms, and the related risk. Accordingly, changes in these assumptions would result in a variance in the fair value estimates. The amounts presented exclude the land lease liability. The fair value of debt on investment properties is determined by discounting the expected cash flows of each mortgage using market discount rates. The fair value is estimated based on discounted cash flows using discount rates that reflect current market conditions for instruments with similar terms and risks. In determining the adjustment for credit risk, the Company considers market conditions, the fair value of the investment properties that the mortgages are secured by and other indicators of the Company's creditworthiness. As a result, these measurements are classified as level 3 in the fair value hierarchy. The Company recognizes transfers into and transfers out of fair value hierarchy levels as at the date of the event or change in circumstances that caused the transfer. There were no transfers between hierarchy levels during the period. 17. Segment information The Company’s chief executive officer and chief financial officer examined the Company’s performance and have concluded that the Company has one reportable segment - that being the rental of industrial, commercial, multi-family, retail and office real estate properties located in Canada. Although properties are in different Canadian regions and in different asset classes, they have reasonably similar returns and risks. Madison Pacific Properties Inc. Notes to the Condensed Interim Consolidated Financial Statements For the Three and Nine Months Ended September 30, 2025 and August 31, 2024 (unaudited) (expressed in thousands of Canadian dollars, except number of shares and per share amounts) 19 18. Capital management The primary objective of the Company’s capital management is to ensure that it maintains adequate capital resources in order to support its business and maximize shareholder value. The Company manages its capital structure with the goal of minimizing risk to the stability of cash flows from properties. Other goals include maintaining debt service coverage, interest coverage, and debt to equity ratios. The Company’s capital includes mortgage loans, construction loans, a lease liability, a line of credit, and equity. The Company’s principal source of financing is from mortgage loans. The ability to obtain a mortgage loan is dependent on the value of a specific property and the cash flows the property generates and the availability of funds from ti --- me to time from lending institutions. The Company expects to renew mortgage loans under similar terms as they become due except for higher interest rates and lower loan-to-value ratios. There have been no changes in the Company’s approach to capital management in the nine months ended September 30, 2025. The calculation of the total capital, excluding the undrawn line of credit, is summarized as follows: September 30, 2025 December 31, 2024 $ $ Fixed rate mortgage loans and lease liability 348,302 303,181 Variable rate mortgages 2,575 12,081 350,877 315,262 Equity 406,473 416,752 757,350 732,014 19. Subsequent events In October 2025, the Company entered into an agreement to acquire a 50% interest in a 20-unit residential apartment property located in Metro Vancouver for $2,275 excluding closing costs. The acquisition is expected to be completed in January 2026.